Rebecca Ohana
Updated on 27.10.2022
Connected TV (CTV) And Its Advertising Potential
Should I Better Call Saul only if you’re Breaking Bad?
The best way to enjoy your binge-worthy TV shows is up to you. Although we recommend to first watch Breaking Bad and then Better Call Saul.
The appetite for binge-worthy video content is one of the emergent trends in digital advertising. With cord-cutting being the norm, Connected TV is becoming an ubiquitous part of everyday life. In fact, 87% of American households own at least one CTV device.
This is why advertisers reallocated considerable parts of their budgets in the past year from linear TV to CTV. we
What is Connected TV?
Connected TV (CTV), is a TV device that connects to the internet and enables viewers to access video content.
CTV devices encompass a wide range of options. This includes Smart TVs equipped with built-in Wi-Fi and streaming capabilities, popular gaming consoles like Xbox or Playstation, as well as dedicated streaming devices such as Apple TV, Google Chromecast, Amazon Fire TV Stick, and Roku.
The investment in Connected TV advertising is projected to increase significantly with an anticipated growth rate of 33.1%, reaching $18.9 billion in the US this year. In terms of upfront digital video spending, CTV is expected to capture over two-thirds of the market share in the US.
Linear TV advertising budgets are still projected to reach $68 billion by the end of 2022. This means that the gap between linear TV and CTV advertising is narrowing at an unprecedented pace.
Why invest in Connected TV
US CTV ad spending is forecasted to double by 2025. This is just one good reason why you should allocate some of your marketing budget to Connected TV advertising. We’ve listed a few reasons:
Automation
Thanks to automation programmatic ad buying and real-time bidding processes are completed in milliseconds. This streamlined automation saves significant time compared to traditional methods which involve requests for proposals, tenders, quotes, and human negotiation. Delegating smaller tasks to automation allows more time for skilled employees to do other work.
Algorithmic
Programmatic ad buying relies on algorithms to precisely determine the ideal timing and placement for delivering your content to targeted consumers. These algorithms collect and analyze data from thousands (or more) of individual users, allowing for the creation of detailed buyer personas based on shared characteristics, behaviors, and other factors.
Audience targeting
By leveraging data such as demographics, location, device, operating system, browsing history, and more, programmatic ad buying enables precise targeting of your intended audience. The algorithm can be tailored to reach your exact buyer.
In the realm of advertising, understanding your customers and utilizing that knowledge to reach the right individuals is crucial. Audience targeting is the key to achieving this goal. Programmatic ad buying maximizes the potential of targeting while minimizing ad waste spending on audiences outside of your target demographic.
Real-time campaign reporting and insights
Programmatic advertising provides real-time data that advertisers can leverage to optimize and adjust their campaigns on the fly, a feat that is challenging (if not impossible) with traditional ad placement methods. This feature is arguably the most valuable aspect of programmatic advertising as it allows for informed decision-making throughout the campaign and the ability to make prompt adjustments when necessary.
In the media industry, finding successful campaigns can be a daunting task. However, with real-time reporting and insights, advertisers can swiftly obtain reliable data about their campaigns, enabling them to identify underperforming elements before they consume unnecessary resources. Traditional methods would struggle to offer the same level of precision and timely insights, taking considerably longer to discern what is effective and what is not.
Reach and relevance
Programmatic ad buying across multiple ad exchanges empowers advertisers to extend their reach beyond traditional means. This means gaining access to a broader pool of current and potential customers across multiple platforms with just a click!
For more information visit our website and check out the knowledge center.
Rebecca Ohana
Marketing Manager
- 06.04.2022
Key Takeaway – Programmatic CTV Advertising
In conclusion, despite the cmmon challenges when introducing any new advertising method, the CTV market is expected to be lucrative for years. It has presented the industry with incredible programmatic opportunities, and the introduction of industry standards will likely set the landscape for the future of CTV practices.
Programmatic CTV Opportunities & Overcoming Barriers
As foreseen by many, innovation and advancement in Connected TV (CTV) is one of the significant emergent trends in 2022. Advertisers reallocated considerable parts of their budgets in the past year from linear TV to CTV. According to Extreme Research, in Q2 2022, CTV accounted for 38% of all impressions served, the same share it had in Q1.
Market Potential - Programmatic Advertising
eMarketer has estimated CTV ad spend to grow by 32.3% from 2021 to 2022 to $24.2 billion in 2023, up from $14.4 billion in 2021. The forecast also sees US CTV ad spending more than doubling by 2025, surpassing $30 billion.
When it comes to CTV, tech companies have an unprecedented opportunity to accommodate the needs of content owners and advertisers in the programmatic marketplace. The companies can achieve this by offering tools, such as Supply Path Optimization (SPO), to protect media budgets and achieve efficiency through more direct buying paths.
There is also a need to facilitate the measurement process with CTV. Compared to direct buys in linear TV advertising, if done right, programmatic marketplaces allow for a more effective method of targeting and an improved understanding of campaign results.
Industry Standards - CTV Advertising Market
As the TV and digital worlds converge, some issues remain with CTV. For CTV to truly deliver on its promise and scale, the industry needs technical standards that enable interoperability and efficiency. Since CTV is a novelty at least compared to other ad formats, there are currently no widely adopted industry standards concerning it. As such, certain industry players, like non-profit consortium IAB, are hard at work to catch up and introduce standards, hopefully for near-term adoption.
On March 31, 2022, IAB released its “Ad Format Guidelines for Digital Video and CTV.” IAB works with the industry developing guidelines and technology, writing specs, and providing services to align and standardize the industry to enable growth. The main themes cover brand safety and ad fraud; identity, data, and consumer privacy; ad experiences and measurement; and programmatic efficiency. The in-depth 2022 guidelines accommodate high-quality video requirements for cross-screen video advertising on desktop, mobile, and CTV.
This guideline aims to reduce the fragmentation of ad formats used by various CTV publishers. It also creates standardization to enable advertisers to use their digital assets across screens more easily, while still protecting publishers’ interests. This standardization will help cost saving by reducing the need for video assets in multiple formats. Overall, the uptake in standardization will enable a more seamless transition of ad dollar spend from linear TV to CTV.
Anthony Katsur, CEO of IAB, explains that standardizing ad formats will allow publishers to “scale their inventory more easily across different distribution channels, such as programmatic marketplaces or ad networks, which will deliver better fill rates.” In addition, he says that for advertisers, standardization makes cross-screen programmatic activation of CTV and Digital Video simpler.
According to IAB, promoting and adhering to CTV ad file submission guidelines will help streamline ad placement and development operations while delivering the best possible experience in the user’s device for the available bandwidth. So, who should use the guidelines and how?
IAB recommends that:
- Publishers use it as a resource to provide creative submission requirements for video ads.
- Video ad developers use it as a reference for baseline ad development specifications.
- Studios, video ad technologists, creative agencies, and video ad-serving partners use it as a reference for digital video ad specifications.
The CTV market is expected to be a fruitful one for years to come, and it has presented the industry with great opportunities and challenges. As industry standards will be introduced, it will likely set the landscape for the future of CTV practices. Moreover, it will be critical for tech players to have an accurate fraud prevention system in place, to ensure safe and accurate CTV practices.